Saturday, February 28, 2009

Obama's budget is the end of an era

Reporting from Washington -- Not since Lyndon B. Johnson and Franklin D. Roosevelt has a president moved to expand the role of government so much on so many fronts -- and with such a demanding sense of urgency.

The scope of President Obama's ambition was laid bare in the budget blueprint issued Thursday.

The budget would account for 24.1% of next year's estimated gross domestic product, one of the highest percentages since World War II, and would raise taxes, redistribute income, spend more on social programs than on defense, and implement policies that touch almost every aspect of Americans' lives -- their banks, healthcare, schools, even the air they breathe.

Even more stark than the breadth and scale of Obama's proposals was his determination to break with the conservative principles that have dominated national politics and policymaking since Ronald Reagan's election as president in 1980.

"It changes the whole paradigm," said Sen. Charles E. Schumer (D-N.Y.). "We're going to have a government that helps people."

House Minority Leader John A. Boehner (R-Ohio) took another view. "The era of big government is back, and Democrats are asking you to pay for it," he said.

Obama's budget plan asserts that in some areas, government can do a better job than private enterprise and do it for less. For instance, he argues, Washington can provide loans to college students just as efficiently and at lower cost than the private lenders who dominate the field.

And after years of steady growth in the share of the nation's wealth owned by its most affluent citizens, Obama is calling for tax changes that would require high-income taxpayers to shoulder more of the load.

The question now is whether Congress will go along.

The question applies, in particular, to Blue Dog Democrats, members of the House and Senate who in recent years have won election from traditionally conservative and Republican areas by positioning themselves as moderate to conservative, especially on spending and the deficit.

Although Obama's supporters enjoy a comfortable margin in the House, his $787-billion economic stimulus package passed the Senate only after a deal was struck with conservative Democrats and three moderate Republicans.

As a candidate, Obama often staked out positions so general or nuanced that voters often inferred that he agreed with them even though he had not quite said so. That approach broadened his appeal. And in his first five weeks as president, Obama largely continued that approach, signaling that he was willing to listen to all sides and using his choice of Cabinet members to strike balances among different interest groups.

That stage of his presidency appears to be ending. The budget outline suggests that Obama is ready to start spending his political capital -- a recent Gallup poll found that 67% of Americans approved of the way he was handling the stimulus bill -- and risk making enemies in the pursuit of ambitious policy goals.

The breadth of the budget has an advantage: Even if Obama achieves only part of his goals, that could leave a long record of accomplishment. But by proposing action on such a wide range of fronts, Obama also risks overloading the often cumbersome legislative machinery of Capitol Hill.

"I cannot remember a time when Congress had an agenda of this scope, size and difficulty," said former Rep. Lee H. Hamilton, an Indiana Democrat who spent 34 years in the House.

He compared the magnitude of Obama's agenda to that of Johnson's Great Society, which launched a costly war on poverty and pushed through the most far-reaching civil rights laws since President Lincoln.

Obama has already demonstrated an ability to get Congress to break its institutional inertia. The economic stimulus was one of the biggest bills in history, and it made it through the congressional maze in record time.

Part of his approach to achieving that was to set the broad parameters of the initiative and leave it to congressional Democrats to fill in the details. On the stimulus, no detail seemed more important to Obama than two demands: The package had to be big, and it had to be approved quickly.

In the new budget blueprint -- a basic outline of the budget to be submitted to Congress in April -- Obama has similarly left it to Congress to write the details of his healthcare initiative. But he wants it at the top of Capitol Hill's agenda.

"The urgency on healthcare is now," said Sen. Ron Wyden (D-Ore.). "After 60 years of yakking about healthcare, he's saying, 'I don't want to wait for year 61.' "

All this has left Republicans largely on the sidelines, despite earlier talk about a new era of bipartisanship. Indeed, the budget's sharp U-turn away from conservative principles shows how willing Obama is to confront Republicans directly.

Obama's leadership style is a far cry from other recent presidents, like Bill Clinton, who declared "The era of big government is over" and made an art form of proposing modest initiatives, such as requiring school uniforms as a step toward improving education.

Some in Washington were surprised by the budget because Obama's approach often blurs distinctions rather than highlights them.

But in writing this budget, he had to drop the shades of gray because a budget is all numbers in black and white. Either spending for defense goes up or down; taxes are raised or they are cut.

Although Obama has tried to cut a nonideological profile and has staffed his administration with many moderates, much of his budget reflects liberal ideals.

He says government can do some things better and cheaper than the private sector. He embraces income redistribution of sorts by proposing to pay for his healthcare initiative with increasing taxes on the wealthy.

And without apology, the budget document essentially declared the end of an era: "The past eight years have discredited once and for all the philosophy of trickle-down economics -- that tax breaks, income gains and wealth creation among the wealthy eventually will work their way down to the middle class."

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